Hussman Weekly Commentary: Rich Valuations and Rising Yields are a Dangerous Combination

More well-reasoned doom & gloom from Hussman. I certainly hope he's wrong, but I cannot find a flaw in his reasoning. The best case scenario is that earnings turn out to be very positive for the 1st Quarter and the inevitable correction is delayed.

Hussman Funds - Weekly Market Comment: April 10, 2006 - Rich Valuations and Rising Yields are a Dangerous Combination:

"I won't bother mincing words. Given rich global stock market valuations, slumping quality of internal market action, and rising global interest rates, this is not an appropriate time to accept significant market risk. There is no assurance that stock prices will fall, and no assurance that they might not instead rise further. But from the standpoint of a long-term investor, it's useful to look over the past 7+ years of profitless excitement in the stock market and ask whether tracking every fluctuation in the market - even participating in periodic, marginal new highs - is a necessary objective. In my view, the necessary objective is to accept market risk when the likely return/risk profile is attractive, based on observable measures of valuation and market action, and to avoid, hedge, or diversify away those risks that don't carry attractive return/risk profiles on average."